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Andy Burnham: I did not say that the set-up costs would be absorbed in the £584 million; they are additional. The baseline for the UK Passport Service is included in the £584 million. I said that the increment—the additional amount in respect of ID cards—was in the region of £200 million a year. That is the increment for the annual running costs; the set-up costs will be much less than £584 million a year.

Sammy Wilson: The hon. Member for Birmingham, Selly Oak asked how the costs of the scheme would be paid. One of the options was that it would be on an annual leasing basis, but would that be included as part of the cost of the card? If so, the cost of the card would increase.

The right hon. Member for Holborn and St. Pancras said that, due to the six-monthly reports, the amendment would put chocks under the wheels—the scheme could be stopped—but there are no sanctions in the amendment, so I do not know how that would happen. Reference has been made to many public sector schemes this evening, and we are all familiar with the Child Support Agency on which £400 million was spent, yet three years on, we are still considering what to do about it. Once the capital investment in the technology was made, it was felt that we had to try to make it work. I suspect that will be the case with the ID card scheme. Once the capital investment has been made, and the scheme is up and running and a large number of people have bought the cards, the argument, regardless of the costs, will be, "Well, we can't drop it now. People have paid for the cards and we've bought the technology, so we've got to make it work". If that means extra costs, that is what will happen.

The amendment will not put the chocks under the wheels. All it will do is enable us to observe, on a six-monthly basis, the increase in the costs of the scheme. I do not know whether it will cost £24 billion or £5.8 billion, but from my experience of local government, the Policing Board or central Government, the one thing I know is that IT schemes of that nature never run out at the original cost. The amendment will enable us to watch the costs increasing, but we shall be unable to stop the bandwagon rolling. For that reason, I shall not support it.

Mr. Todd: I shall try to focus on the amendments. I have quite a lot of sympathy for the Lords amendment, although in many respects it is not perfect, so I shall not endorse it. Nor shall I endorse the amendment tabled by my right hon. Friend the Member for Holborn and St. Pancras (Frank Dobson), for reasons that I shall give in a moment.
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The Lords amendment is rather too narrowly written. I tabled a new clause on Report that attempted to set out the kind of things that I would expect the Government to produce before they authorised substantial expenditure on such a project. Unfortunately, that new clause was not selected, but it focused first on the fact that the Secretary of State ought to set out properly the reasons for such a proposal. We have seen a number of documents so far that, frankly, make limited reading indeed in explaining why the proposal is a good idea, why it will produce the sort of benefits that have been vaguely referred to and why we should endorse it. I do not share some colleagues' views that the Bill is a terrible threat to civil liberties. I have never thought that. My instinct is that it might be a terrible threat to our public purse. That has been the focus of my concern throughout.

Secondly, I would expect the costs and benefits to be set out in reasonable terms. This is not the time at which one could certainly demonstrate the cost with any authority. As I have remarked in my interventions, frankly, the LSE proposals are based on its own concept of how an ID card system might work. They may be valuable in those terms, but they have no authority since they bear no relationship to what the Government may be attempting to do.

The Government have set out their ideas in such vague terms that, frankly, it would be impossible for a professional contractor to produce anything other than fairly speculative estimates of how much those ideas might cost. That is why I have remarked on the KPMG report. I do not know how much was spent on it, but to be honest, it will do what most consultants will wisely do: it will cover their bases very carefully and certainly not end up by giving a great deal of authority to a figure that most professionals would say could only be speculative at this time. I suspect that, if the full report were made available, one would probably see those caveats written in rather larger type than in the summary. I would expect the costs and benefits to be produced, but when procurement was about to proceed. That was the point of the new clause that I tabled on Report.

Thirdly, I would want the assumptions behind any savings to be properly set out. I intervened on my hon. Friend the Minister about the buy-in of other stakeholders in the project. I referred particularly to the private sector, but I could equally have touched on the role of other Departments. Even given the rather vague business case that has been produced to date, the private sector obviously has an important role to play. It is understood that the project may be crucial in reducing fraud in our financial system. If so, one might expect that many of our financial institutions would be putting up their hands now, saying "We wholeheartedly endorse this project, and we wish to see it proceed as fast as possible."

I drew my hon. Friend the Minister's attention to the fact that those statements of faith have, as yet, not been made. When I questioned officials and IT professionals, they gave a rather sunny and optimistic reason for that and suggested that people were waiting for the Bill to be passed and would then dive in very quickly. They genuinely do not know whether they are buying a pig in a poke, exactly what the project involves and what meaning it may have for their businesses. For that reason, they are most unlikely to put a buy-in together.
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I would expect the stakeholders—whether private sector partners or those in other aspects of government, such as the agencies and Departments, which must clearly play a part—to make a much more coherent statement of the benefits when procurement is about to proceed.

My hon. Friend the Member for Birmingham, Selly Oak (Lynne Jones) referred to the Department of Health, and that is a very good example. We would expect it to participate in the scheme, but I doubt whether it has even the vaguest idea of how the scheme might apply to what it does.Much of the information will be required at some stage in the future. I do not expect the documents that the Government have produced so far to refer to it in detail, but I would expect there to be a point at which we have an opportunity to review the details before further substantial sums of public money are committed.

9.30 pm

I also want a much more rigorous examination of the risks in the project—one or two of them have been touched on in the debate—and how they are likely to be mitigated. Risk mitigation means cost. Dealing with perceived events and working out their likelihood of threatening a project of this kind require steps to improve its security. Such steps may deal only with a one-in-a-million circumstance but, in a project as central as this, a one-in-a-million circumstance may well be what we have to deal with.

I often remark that our tolerance of error rates for people flying airlines or performing complex surgery is much lower than it would be for someone performing a less critical function. We expect people carrying out high-risk functions to take steps to reduce the risks either through the intervention of technology or additional human support. Those certainly cost money. I am not clear how the risks have been analysed and how costs have been applied to reducing those risks.

I have described the points that I would like to have seen covered but, unfortunately, the Lords amendment is rather more narrowly drawn. If they choose to consider what happens tonight, they may want to reflect on that should they return the issue to us.

I have already referred to the importance of transparency for all our benefit in the project. A number of reports have been pulled together by agencies outside and inside government to assist us in judging whether it is the right thing to do. We have had the KPMG report. Although I would not want to read it in considerable detail, its full publication would have been helpful to us at this time. The Office of Government Commerce gateway process that the project will go through on a number of occasions at various points in its life also provides a useful indication of risk. One of its major focuses is to say what risks have been anticipated in the running of the project and how we might deal with them. From the little glimpse that some civil servants kindly gave me the last time the process was carried out, it is not surprising that it is regarded as extremely high risk with a number of flashing amber lights indicating that steps need to be taken to deal with possible failure in the future. That would not surprise anyone, but it would be useful to have the risks more clearly defined so that we can understand them and can start to put money towards dealing with them.
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I also wish to refer to the concept viability report that the industry has been asked to produce. I believe that it has actually been produced and the Minister told me earlier that it would be published at the procurement point. I would rather see it now, so that I can understand the industry's reaction. Those in the industry that I have spoken to have broadly said that most of them would love to take part in such a project because it looks like serious stacks of money are involved.

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